Judge denies former Speaker Fox’s bid to quash 38 Studios subpoena

Tuesday

Jun 3, 2014 at 9:05 AM

PROVIDENCE, R.I. -- R.I. Superior Court Judge Michael A. Silverstein has denied former Rhode Island House Speaker Gordon Fox’s request to quash a subpoena served on him in connection with the 38 Studios lawsuit.

Paul Grimaldi Journal Staff Writer paulegrimaldi

PROVIDENCE, R.I. -- R.I. Superior Court Judge Michael A. Silverstein has denied former Rhode Island House Speaker Gordon Fox’s request to quash a subpoena served on him in connection with the 38 Studios lawsuit.

The judge’s decision Tuesday morning in Superior Court means Fox will have to give a deposition in the case. First Southwest Co., one of 14 defendants in the case, wants to question the former House Speaker to learn what role he may have played in the company's decision to move to Providence in 2011.

The R.I. Economic Development Corporation sued 14 individuals, law firms and financial institutions in Superior Court in November 2012, a few months after Schilling's videogame company filed for bankruptcy. Fox is not a defendant in the case.

The agency -- now known as the R.I. Commerce Corporation -- seeks money to help cover the costs of the $75-million bond sale that raised money for 38 Studios' operation in Rhode Island.

The company's closure left the General Assembly with the task of deciding whether to repay the bonds and the $37.6 million in interest payments that go along with them over 10 years - for a total of $112.6 million.

Excluding the amounts covered by reserve funds, state taxpayers owe $89.2 million on the state-backed loan.

Fox's lawyer, Albin Moser, failed to persuade the judge to quash one of two subpoenas issued to him by defendants in the case. Moser cited the March raid of Fox's State House office and his Providence home by state and federal investigators as the reasoning for the request.

Fox resigned his leadership post shortly after the raids.

"He is clearly a target," Moser said, of a potential criminal investigation and may inadvertently disclose information in a deposition that could be used against him in that inquiry.

Moser said disclosing any information in the 38 Studios case would violate Fox's Fifth Amendment rights.

While Silverstein's ruling means Fox will have to sit for questioning by First Southwest's lawyers, the legislator retains the right to assert his 5th Amendment rights and decline to answer them.

Silverstein did not rule Tuesday on a second subpoena served on Fox in the 38 Studios case, this one by Wells Fargo Securities LLC for documents related to the $75-million loan guarantee that brought Schilling's company to Providence.

The judge said he would rule next week on Fox's request to quash the Wells Fargo subpoena.

-- This report was initially published at 10:05 a.m. and updated at 11:00 a.m.